The nation’s official manufacturing purchasing managers’ index (PMI) accelerated from 57.5 in March to 58 last month, as a stable economy led firms to increase purchasing activity, despite a slow season for technology products and uncertainty over a looming trade war between the US and China, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
It was the first time the Taipei-based think tank issued a seasonally adjusted PMI reading that showed operating conditions continuing to improve in all manufacturing sectors, thanks to a stable global economy, CIER president Wu Chung-shu (吳中書) told a media briefing.
The pickup came despite disappointing iPhone sales, mainly because local technology firms have increasingly cut their dependence on Apple Inc and have sought business opportunities in fields including connected vehicles and biotechnology, he said.
“Local firms are good at adapting to the rise and fall of technology products and have ardently tapped businesses other than mobile gadgets,” Wu said.
That explained last month’s strongest showing by vendors of electronic and optical devices with a PMI reading of 65.3, followed by suppliers of electric and machinery equipment at 62.1, he said.
PMI aims to capture the health of the manufacturing industry, with scores above 50 indicating improvement and those below that threshold suggesting deterioration.
The private Nikkei Taiwan Manufacturing PMI reached a similar conclusion, remaining at a high level of 54.8, albeit slowing from 55.3 in March.
The economic outlook looks bright and would continue to lend support to Taiwan’s export-oriented economy, CIER said in a report.
“I have not spotted signs of a downturn yet,” Wu said, after PMI remained in positive territory for the 25th consecutive month and major firms in Apple’s supply chain reported lackluster earnings.
The new business subindex reached a robust 56 and the industrial output subindex rose to 58, both gaining traction from a month earlier, the report said.
The subindex on input prices held high at 71.7, easing from 75.4, as strong demand pushed up commodity prices, it said.
For example, there is a severe shortage of passive components this and next year, driven by fast-growing demand for products used in electric cars, autonomous vehicles, industrial devices, premium smartphones and new applications, such as virtual reality and artificial intelligence, Supply Management Institute in Taiwan (中華採購與供應管理協會) executive director Steve Lai (賴樹鑫) said.
All sectors are upbeat about business going forward, with the six-month outlook subindex standing at 63, the report said.
The business improvement extended to service-focused sectors, with the non-manufacturing index last month rising to 55.6, from 54.4 in March, although restaurants and retailers proved the exception, Wu said.
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